MakerDAO, ETH’s decentralized financial system, suggested a historic vote earlier this week. The vote aimed to link a United States Bank to its platform.
Meanwhile, the idea has received widespread community support. As a result, the Huntingdon Valley Bank (HVB) will be given an initial debt cap of $100 million.
This was after over 87% of the community voted “YES”. The 87% represents 117,000 MKR tokens, while only 4,200MKR rejected the idea.
The report stated that:
“The Huntingdon Valley Bank is looking for a 100M DAI debt cap facility. The aim is to expand its current businesses and also start up new ones. The relationship between RWA Master Participation Trust (RWAMPT) and HVB will not be a borrower-lender relationship.”
HVB Will Have Access To Liquidity From MakerDAO
Furthermore, HVB can now access liquidity from MakerDAO. This will take the form of the DAI stablecoin.
These stablecoins will be exchanged for participation rights in the actual full loan from HVB. Besides, the bank is focused on developing floating and fixed commercial and residential mortgages.
Through this collaboration, the bank will be able to propose possible loans. MakerDAO can take part in these loans via the RWAMPT. As a result, the DeFi system can take an active role in this activity.
This is the first time MakerDAO will fund loans via a US financial institution. Thus, the voting and the cooperation with the HVB are significant. MakerDAO explained via its Twitter account:
“Ankura Trust, the calculating agent, will make sure that suggested loan participations are qualified for funding whenever HVB presents loans for participation. If participants agree, the Trust will sign a Certificate of Participation in return for cash. Also, it will take a 50% maximum interest in the actual loan.”
MakerDAO To Alter The US Financial Loan System
The proposal has certain dangers for HVB due to regulations in the US. However, its supporters think the HVB has enough stake to offset them.
Moreover, the proposal asserts that the banking firm has a positive working relationship with American authorities. Also, it operates with a “conservative” business strategy.
The benefits outweigh the possible dangers in this situation. The MakerDAO vote appears to support this viewpoint. However, collaboration with a conventional financial institution may open doors for MakerDAO.
It could result in new development and growth of the platform. Real-world assets will be available to the DeFi protocols and its community This will give them the chance to build a liquidity fund for HVB.
In addition, other opportunities include wholesale lending, alignment, and symbiosis. This deal could create a new chapter for other firms to follow.